For Andrei Cherny, the co-founder and chief executive of Aspiration, the socially conscious online banking and investing fintech, a stint at public relations firm Burson-Marsteller changed his life forever.
After years of pursuing a political career, Cherny was the chairman of the Arizona Democratic Party and unsuccessfully ran for the Arizona state treasurer and U.S. House of Representatives, he decided to pursue a different track. That didn’t mean he abandoned his values he just needed an alternative way to push the causes he cared about.
At Burson-Marsteller a lot of the clients were huge financial firms that had millions upon millions of customers who simply hated the banks and were looking for an alternative. That got Cherny thinking. After brainstorming with Joseph Sanberg, a progressive Democrat and investor out of California the two decided to launch Aspiration, which today has 200 employees and more than 1 million customers. It has raised $67.5 million in total funding, according to Crunchbase.
In April Reuters reported the company was looking to raise $200 million, which would give it a valuation of more than $1 billion. In December of 2017, it raised $47 million with investors Social Impact Finance, Omidyar Network and Allen & Co taking part in the round. It also counts Orlando Bloom and Leonardo DiCaprio as backers. About two-thirds of Aspiration’s customers are under the age of 40.
Aspiration is different than other fintech companies and traditional banks in that it donates ten cents of every dollar of its revenue to charities that provide economic opportunities to people in the U.S. It offers an online checking account with up to 1% annual interest, no ATM fees, and no monthly charges. It also offers professionally managed funds and IRAs that are fossil fuel free. Customers get to decide how much to pay for investment management. If they don’t think Aspiration did a good job the customer doesn’t have to pay anything.
While Cherny still lives in Arizona they decided to incorporate in Los Angeles to easily tap the talent needed for the startup. “The talent you need to build something like this is in L.A.,” Cherny said in a recent interview. “There are a lot of successful start-ups here and a real technology ecosystem. When we have to relocate people from the Bay Area or New York, L.A. is a magnet.” The 43-year-old executive commutes to his home in Phoenix. Since he spends most of his days and nights in the office it didn’t make sense to relocate his wife and two children.
While Aspiration is operating in a crowded market, with many challenger banks launching, Cherny thinks the fintech has an advantage since its among the few going after it with a socially conscious bent. And it’s not just marketing. Cherny, who envisioned a lifetime in politics prior to launching Aspiration wants to ensure his values shine through in any company he operates. “There are conscious consumers all over America,” Cherny said in the report, acknowledging the fintech has yet to turn a profit.